Annual Report for the year ended 31 December 2008

The market conditions for most of 2008 were the most demanding for
generations. The Group’s businesses have not been immune from the
effect of those challenges. The Group has operated against the backdrop
of significant volatility in the uK Equity market and weak ipO markets
across all sectors, especially AiM.
Total income (before fee and commission expenses) for the Evolution
Group plc fell from £87.5m to £65.2m, a decrease of 25%.
in spite of very challenging market conditions the Group has made significant
progress and has continued to restructure its businesses. This restructuring
will ensure we can withstand the economic downturn and also capitalise
on opportunities that arise both now and as economic conditions improve
and markets recover.
Our long established policy of maintaining a very strong and liquid Balance
sheet has been validated, and during the year has enabled us to make a
significant acquisition and to continue the recruitment of quality people to
position our businesses for future growth. As we have done that, we have
taken a conscious decision to reward (both to retain and motivate) those
people we need for the future. Equally, we have continued to significantly
reduce our cost base where appropriate.
CHAIRmAN’S STATEmENT
THE EVOLUTION GROUP PLC
2 02 THE EvOluTiON GROup plC ANNuAl REpORT & ACCOuNTs 2008
Evolution securities continued to make a significant contribution to the
Group, achieving total income (before fee and commission expenses) of
£29.8m (2007: £54.7m). Achieving a better balance between primary
and secondary market activities has been a priority for this business.
This was achieved in 2008 despite the disruptions caused to the
primary issuance sector.
Williams de Broë, the private client investment management business,
has continued to invest and has grown assets under management
both organically and through acquisition.
Assets under management have increased by 21% from £2.8bn to
£3.4bn at the end of 2008. income (before fee and commission
expenses) increased to £35.7m in 2008 from £32.6m in 2007.
The Group acquired the singer & Friedlander investment Management
business on 21st October 2008. That acquisition, for a consideration
of £4.4m, is proving very successful, and over £1bn of assets under
management have been transferred. We expect the acquisition to be
accretive in 2009.
Evolution securities China is shown as a discontinued business.
As announced on the 9 March 2009, the Group entered into an agreement
with First Eastern to acquire a controlling interest in EsCl. On 1 April
2009, the Company announced the completion of the investment
which included subscription for shares whereby First Eastern now holds
51% of the ordinary share capital of EsCl, with The Group retaining
48.5%. We believe this partnership will combine Evolution Group’s well
financed and independent position in london with First Eastern’s
considerable experience and proprietary deal flow in the Chinese
market. We believe the partnership will provide the opportunity for
EsCl to be First Eastern’s principal partner in the uK and Hong Kong
for a wide range of capital market opportunities.